Chrysler has developed a number of significant partnerships in the area of powertrain. They can help to buffer risk and ensure maximum technology coverage to underpin competiveness. Bob Lee, Chrysler’s VP for Powertrain Product Engineering, tells just-auto editor Dave Leggett how that works and also considers the challenges ahead for both Chrysler and the auto industry generally.
Please note that this interview took place in September and first appeared in the Lotus Engineering e-magazine proActive.
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DL: What do you see as the main challenges for automakers generally in the powertrain area?
BL: Many challenges have hit at the same time. We are faced with the regulatory environments for emissions and fuel economy across the world in places where we sell our vehicles. Another thing which has received a lot of attention lately is what’s going on in financial markets and how that has spread around the world. So, there’s a combination of all the new regulations – particularly related to fuel economy, which require a lot of work and a lot of investment – and then the whammy that comes with the market condition where customers want to buy vehicles but they can’t necessarily get financing for them. This translates into a cash-flow problem for us…
What should be the golden era for powertrain engineers with all of the technical challenges in front of us has instead turned into a kind of 1929. It’s an interesting collision of events.
What does this mean for powertrain specifically? It means we must be very judicious about the things we work on. We must scan the horizon and select the things we think are most appropriate and then if the risks or capabilities are still not quite where they need to be, we need to partner up with those who have similar interests. That’s how we are buffering the risks and trying to ride out this unprecedented collision of forces.
DL: And how do you feel about how things are going for Chrysler right now?
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By GlobalDataBL: The overall situation is actually pretty good [please note that this interview was conducted in September – ed]. It’s not great, because people could be buying more cars, obviously, but we’ve got a really strong leadership team here and an excellent plan for the future. We also have Cerberus as a parent. They have some incredibly bright people and a wonderful way of doing business. That’s a kind of hidden thing that not many people realise.
We’ve got guys who are new to us – like Bob Nardelli and Jim Press – that bring tremendous insights. Mr. Nardelli can open his Rolodex and, it seems like literally, call anybody in the world. When we’re talking about doing business deals and we’re trying to do things. It’s just a different era for us to be able to have that much access and that much insight into what’s going on in the world.
DL: Can you cite an example of how the private equity ownership and management works differently in practice [to what went before]?
BL: Yes, we were in a planning session talking about various controls systems and software and Bob Nardelli said that he used to run a business that was in that field and suggested we call up so and so. It turns out this guy runs a business that does the control systems for gas turbines and power plants around the world. So the software he was talking about was controlling these things in huge facilities – we’re talking about thousands and thousands of lines of code. The applications are very different, of course, but it was interesting how
many things we had in common in terms of issues and opportunities.
Some of these we have subsequently worked together on.
That’s just one example of how something which would never have found its way into Chrysler before did. It all turned out to be about software and controls, experienced people and computer simulations.
It’s a way of opening doors that we weren’t so familiar with in the past.
DL: What about the general perception that some people have that Chrysler has not at times built cars to a very high quality? What is Chrysler doing to improve quality?
BL: I think this is a two-element question; one is about quality and delivering to market requirements and the other is specifying those requirements.
To take the quality issue, the data that we have for process control and the ability to do the same things over and over again at our plants are very good. We have improved tremendously over the last ten years and are in the same zone as the best.
Where we have had the ‘mis-step’ that the press has talked about and, frankly, customers have too, is in specifying the requirements. We went through some phases a few years ago where we got pretty excited about taking cost out of our products and being able to generate returns for the company by doing that. We did this for many years in a very systematic and structured way and did it in a way that customers were not offended.
But if you do this to excess, you end up losing touch with where you might need to be. These are leadership and policy decisions as the requirements are set. We misjudged where the market would be, particularly in interiors where the market moved very quickly to a greatly upscaled level.
If you look at our new 2009 Dodge Ram you’ll see a very fine example of hitting the market requirements correctly. I’ll say the quality was always there in terms of process repeatability. So now we’ve targeted that market requirement factor and you can see that in the new Ram.
I think there’s good recognition and a good action plan that has been put in place. It’s just a matter now of showing what we can do – like with the pickup – and getting the flow through of the right kinds of products as quickly as possible.
DL: How do you reconcile cost pressures with increasing demands for better-engineered vehicles from customers?
BL: This is the challenge of our business. I don’t think it’s a secret; it is difficult, especially in these times. We work on efficiencies in process and also work to disciplined cost targets. Efficiencies include organisation and knowledge systems, using more simulation than test properties and employing new tools like design for six sigma, etc. There’s no silver bullet, we must push them all constantly, every day and run the business.
Relative to designing to targets, we target what the products must do and we target the costs it must have. We design and engineer to those targets based on customer inputs and if we can’t meet the right ratios, we drop the product and move on.
DL: What’s the basis of Chrysler’s powertrain strategy?
BL: There are two parts to this: First of all, our basic approach is total vehicle system. I know you said powertrain, but the energy demand of the vehicle is incredibly important. For me to do a good powertrain, it must be precisely matched to the losses and efficiencies of the vehicle.
We use a ‘whole house’ analogy at Chrysler. If you think of a house and you want a cost effective and energy-efficient solution, you could go out and buy a new furnace. However, if you have cracks in your windows or doors that don’t seal well, that newer furnace may be more efficient but you are still not going to get the best overall cost-efficient trade-off. It’s very important to look at the entire machine efficiency and make the powertrain match that machine as an integral piece.
So that’s one part.
The second part is our emphasis on controls integration and the integration of the powertrain into the programme with software and controls. We do all of our controls ourselves with the exception of purchased powertrain elements such as diesel engines. That means engine and transmission and all interfaces on the vehicle. We think that’s a strategic capability that we have and we are going to continue to exploit that as we move forward with new technologies.
DL: And there’s an element of strategic partnering too – I’m thinking about diesel engines in particular?
BL: Yes, we partner to optimise investment and to buffer risk. Another good example in addition to diesel engines is the hybridelectric programme, we’re doing with GM, BMW and Mercedes.
DL: How do you see prospects for diesels in the US light vehicle market?
BL: I was on record several years ago as being pretty bullish on diesel prospects in the US – I think I said diesels could take 10-15% of the US market by the 2012 timeframe.
I believed that then, but I didn’t anticipate an inversion of the fuel costs here. A situation where diesel fuel in the US, which used to be US$0.12, US$0.20, US$0.40 a gallon cheaper than gasoline is now anywhere from US$0.20 to, in some cases, US$0.80 a gallon more expensive. Unfortunately, this has really changed things.
We did an experiment a few years ago where the Liberty (known as Cherokee in Europe) was fitted with a diesel for the US market. It did extremely well – we sold more than we had projected. So we hurried about and did a nicer vehicle – a Grand Cherokee – and put that in the US market in ’07 and a half, and sales have not met our expectations.
It’s a very credible vehicle – a really strong competitor to an M-Class, very competitively priced versus an M-Class, and even the same engine. The vehicle’s overall refinement has won all kinds of praise from the press, but the sales are just disappointing.
The combination of the fuel price and whatever else is going on has really led us to wonder what will happen. I’m told VW is bringing their new diesel vehicles to market here soon and we’ll eagerly watch how the market reacts.
But my 10-15% penetration of a few years ago…I’m probably off base by a factor of two.
DL: More like 5% diesel share then?
BL: 5-6% maybe.
DL: What do you see as the main pros and cons in working with so many external partners?
BL: The advantages with multiple partners are easy. There’s a geographic dispersion of input and experience and we also get an ability to share processes and technology. We get a good understanding of what’s going on in the world with multiple partners What’s the problem with that? There can be problems with distributed resources and straining to do things efficiently because not every partner is doing things the same way. We may have two different engines that are calibrated very differently because they come from two different organisations. Things like the electrical interfaces can become more difficult as a result.
So we try to minimise the number of partners yet cover the range of technologies we need in order to be as competitive as we can.
DL: How important are dual-clutch transmissions and how are Chrysler’s DCT plans progressing?
BL: We’ve identified through our ‘whole house’ or whole system approach to fuel economy optimisation, that one of the biggest energy parasitic losses is the transmission. Some transmissions are better than others, but in general DCTs are significantly more efficient than step-ratio transmissions. With a DCT, the first thing we do is eliminate the torque converter and that in itself takes out quite a few percentage points of inefficiency. Then the hydraulics of the internal clutches are eliminated and hence there is a much lower energy demand.
We think DCTs are good. We see typical benefits of 6%-8%. In some cases we see significantly more than that. We have our first DCT in production in Europe on a diesel Sebring vehicle.
We’re on our way and we strongly believe in technology as a part of the total solution.
DL: And that’s proprietary Chrysler technology?
BL: Well, yes and no. We actually designed the DCTs ourselves and then we figured out the best business case and trade-offs on the volumes. As a result, we have entered into an arrangement with Getrag and they’re building a facility here in the US to produce the DCTs for us.
DL: Moving on to hybrids, how is the collaboration with GM, BMW and Mercedes going and how fast do you see this hybrid area developing for Chrysler?
BL: Firstly, the collaboration has been the best collaboration I have ever been involved with. I’ve been around a number of these things in the past and I thought that a three-way (which turned out eventually to be a four-way with the split between Mercedes and ourselves) might present some difficult issues. Much to my surprise, it has worked out very well.
There have been a few bumps in the road of course, but I think Tom Stephens at GM summed it up pretty well when he said that when you visit the Hybrid Development Center you can’t tell who is a Mercedes person, or Chrysler, or BMW or GM. They’re just all working together. Of course there are boundaries on what information gets shared or stored where, but everybody sits together and works together and it’s turned out to be a huge benefit for all of the participants.
As far as hybrids for us are concerned, we started production recently on the Aspen/Durango hybrids with the technology that stems from the cooperation. GM was first to launch in its vehicles, we’re next, followed by Mercedes and BMW, in terms of the rollout of the various applications. We’re working on other applications, but I’m not at liberty to share these future plans at this time.
DL: Do you see a ‘family’ of different-sized hybrid solutions for Chrysler applications?
BL: The cooperation is for three different hybrid machines. The first one is for trucks. Then there’s one for front-wheel drive applications and then a luxury rear-wheel drive version.
We haven’t announced when we are going to rollout the usage of any of the others, but we didn’t get into the hybrid business for one vehicle application.
DL: What’s your feeling on bioethanol and US market prospects in particular?
BL: Now that’s a hard question.
There are a number of studies and a huge range of opinions on this. There are people who think this is influencing food prices, there are people who think the total energy balance from plant-to-wheels is not favourable and there are also a group of people who are quite concerned that the plant species being used to generate some of the material for biomass ethanol are actually invasive and could escape into general vegetation with rather harmful consequences.
I think there is some validity to all of these views.
On the flipside is the political environment. The Detroit Big Three have agreed to make half of our fleets E85 capable in the medium-term and the pressure is on because there is a government mandate for a certain quantity of ethanol to be produced and used every year.
We have E85 capable vehicles, but there are not many filling stations that have the fuel available and there are price support issues, too. We’re doing our part to make the vehicles available, but I honestly do not know where the market is going to go.
DL: What about electric vehicles besides hybrids?
BL: We showed some concepts from our ENVI group at the last Detroit Show and there’s work going on behind the scenes taking that work further.
The good news, much to my surprise, is there is actually capacity in the US to charge vehicles overnight without really affecting the grid appreciably – provided everyone doesn’t charge their batteries at exactly the same time.
I think the technology is good and we know how to do range-extended vehicles as well as pure plug-ins.
But, while there has been progress in batteries, they still cost a lot and there are issues with infrastructure and producing them in quantity. Also, ultimately there are still some unanswered questions with the business model for things like disposal, leasing them, reselling, etc.
We’re certainly not slowing down in this area though. GM’s making a lot of noise with its Volt but we think we have products coming which will be very competitive also.
DL: You’re going down the range-extended route?
BL: There are certainly benefits with that approach. We know that duty cycles are incredibly important to what we give the customer.
The customer doesn’t want to be stuck with the wrong vehicle for his particular duty cycle. There’s clearly a lot of work still to be done on range, for example in cold weather operations. We’re going through those trade-offs now.
There’s no doubt we’re going to see electric vehicles in the Chrysler family and maybe sooner than many expect.
Bob E Lee
Vice President – Powertrain Product Team, Chrysler LLC
Bob Lee was appointed Vice-President – Powertrain Product Engineering Team on 1 January 2004. Lee is responsible for directing the design, development and release of all powertrain systems and components for Chrysler products. This position reports to Frank Klegon, Executive Vice-President – Product Development.
Lee joined the company in 1978 as an engineer-in-training in the Chrysler Institute of Engineering programme and has since held a variety of positions of responsibility in various areas of Powertrain Engineering.
Recent accomplishments include leading the all new 3.7L, 4.7L and 5.7L HEMI engine programme.
Lee was born 17 January 1956, in Chillicothe, Ohio.
Major elements of his professional and academic background
include:
- Vice-President – Powertrain Product Engineering, 2004
- Director – Powertrain Systems & Controls, 2003
- Director – Rear Wheel Drive Engine Engineering, 1999
- Executive Engineer – RWD V-Engine Engineering, 1997
- Senior Manager – Jeep and Truck Base Engine Engineering, 1993
- Supervisor – Advance Engine Systems Development, 1987
- Senior Engineer – Engine Performance Development, 1984
- MBA, Michigan State University, 1993
- MSME, University of Michigan, 1980
- BSME, Ohio State University, 1978
